Avoiding the Crowd

(The On-Demand Attribution)

Moving in and out of markets is the stock-in-trade of finance. It is an associative property. Correlations rise and fall. It is not a fixed reality. It is subject to interpretation, and a lot of that depends on how the factors are put together (associated) yielding to the interpretation (the method yield).

Currently, for example, financial interests are crowded into stocks, looking for yield. Arbitageurs refer to this as “a crowded trade.”

Now, understand, this is a set-up. It is what a big bank’s prop-desk does on a routine basis, using your assets against you. The liability associated with it, however, is limited, which is why Dodd-Frank has the push-out rule.

The limited liability has an unlimited property that emerges as an event probability. It is an interpretation of objective reality (having multiple futures), meaning that it has an on-demand attribution, which is culpable. Since, however, the event has not yet happened (it is the probability of an associative property on demand), there is no legal authority to hold a responsible party liable except to regulate the probable risk associated with a mode of operation. Thus, the push-out rule (operant conditioning) to regulate the probable risk of doing harm.

Conservatives (including many Democrats) think that regulating the free market has a zero-hedge effect, which means it becomes the risk to be avoided. The result is a complex structural dynamic referred to as “regulatory arbitrage” in which market participants are busy coming up with innovative means to circumvent regulatory measures. This is then the “arcane” environment that Mrs. Clinton says is too complicated to meaningfully talk about. She does say, however, agreeing with Senator Sanders, that “The economy should benefit everybody, not just people at the top!”

Mrs. Clinton needs to join the crowd on reinstatement of Glass-Steagall, joining with Senators Sanders and Warren so that the economy will benefit everybody, not just people at the top.


About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
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